Salon Media Raises $1 Million in Equity Financing
This story was written by Rafat Ali.
Salon Media, the parent of Salon.com, has raised $1 million in equity financing by selling its stock, just in time as its money was running out, again. The note, which it issued on April 4, 2008, may be convertible at a future date into common stock of the company at a conversion price equal of $1.68, it said in an SEC filing. . They bear interest at the rate of 7.5 percent per annum, payable semi-annually, in cash or in kind, and mature on March 31, 2012, the filing states. It will use the funds raised for working capital and other general corporate purposes, the company said.
The investors included Dr. John Warnock (founder of Adobe (NSDQ: ADBE) and company Chairman), and William Hambrecht, the father of Elizabeth Hambrecht, a director of the company (and CEO and President until September 13 last year). Warnock and Hambrecht each invested $500k...they have been previous investors.
The site has managed to survive despite prognostications of its demise for the last few years, and has been adding more blogs, audio and video on its sites. This being the election year, its traffic has seen an uptick, in keeping with its political bent. Its revenues, however, has still not seen any rise: in its quarterly report filed in February, its paid subscribers have been decreasing at a steady clip: it ended Q407 with 37,300 subscribers, each paying $45 a year, down from about 47,200 as of March 31, 2007. Ad revenues now constitute about 70 percent of its revenues. It had losses of $0.56 million in Q407, down from a profit of $306K in the year-ago quarter; net revenues decreased 21 percent to $2.2 million for Q407, from $2.8 million for Q406.
By Rafat Ali